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• Total Company Operating EBITDA Growth: Increased by more than 12% in Q1 compared to Q1 2024.

• Sustainability Businesses Operating EBITDA Growth: Grew by over 20% year-over-year.

• Collection and Disposal Operating EBITDA Growth: Up almost 5% with a margin expansion of 10 basis points.

• Revenue Growth: Driven by collection and disposal yield of 4% and core price of 6.5%.

• Operating Expenses as a Percentage of Revenue: 60.5%, a 40-basis-point improvement from Q1 2024.

• Legacy Business Margin: Achieved 30% margin for the fourth consecutive quarter, a 40-basis-point increase from Q1 2024.

• Total Company Margin: 28.5% in the quarter.

• Operating Cash Flow: $1.21 billion in Q1.

• Capital Expenditures: $831 million in Q1.

• Free Cash Flow: $475 million in Q1.

• Dividends Returned to Shareholders: $336 million in Q1.

• Leverage Ratio: 3.58 times at the end of the quarter.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Waste Management Inc (NYSE:WM) reported a strong start to 2025 with first-quarter results exceeding expectations, driven by a 12% growth in operating EBITDA.

• The company's sustainability businesses, including recycling and renewable energy, saw a combined operating EBITDA growth of over 20% year-over-year.

• WM's focus on technology and automation has led to significant improvements in operational efficiency, contributing to margin expansion.

• The integration of WM Healthcare Solutions is progressing well, with a clear path to achieving $250 million in annual run rate synergies by 2027.

• WM has a robust pipeline of tuck-in acquisition opportunities, expecting to close more than $500 million in solid waste acquisitions in 2025, indicating strong growth potential.

Negative Points

• The expiration of alternative fuel tax credits posed a 30-basis-point headwind to the company's margins.

• Winter weather in the Southeast and Gulf Coast regions negatively impacted volumes and posed challenges in the first quarter.

• The strategic exit from low-margin residential business and economic pressures on the industrial segment led to flat volumes in the collection and disposal business.

• The integration of Stericycle's ERP system has presented challenges, impacting the efficiency of the WM Healthcare Solutions business.

• The recycling brokerage revenue is down relative to expectations, although it has low margin impact.

Q & A Highlights

Q: Can you provide more details on your outlook for the second quarter, especially regarding the new healthcare business and solid waste margins? A: Devina Rankin, CFO, explained that there are no unusual seasonality impacts expected, except for the California wildfires. Solid waste business contributed 50 basis points of EBITDA margin expansion, overcoming a 30-basis-point headwind from the alternative fuel tax credit. The healthcare business is expected to see continued momentum in synergy capture and cost optimization, with the strongest margin performance anticipated in Q3.